Photo by: Bloomberg
JOHANNESBURG (miningweekly.com) – Triple-listed diversified miner South32 on Monday changed its 2017 full year guidance for the production of saleable coal from its Illawarra metallurgical coal operation from 7.9-million tonnes to 8.1-million tonnes.
The miner noted that while it has stabilised ground conditions at the mine’s Appin Area 9 longwall, additional work was being undertaken to recondition the maingate roadway to ensure the safe extraction of the 901 panel.
The mine, based in New South Wales, Australia, will also see production continue at its Appin Area 7 and be progressively ramped-up to ensure safe levels of gas are maintained.
However, South32 said it did not foresee the coal price stabilising, adding that the “hard coking coal sales price will continue to reflect the premium low volatile index on a month -1 basis”.
Further, the miner anticipates an average operating unit cost of $86/t for the year, up from its previous forecast of $75/t. However, it notes that this could decline towards $80/t in the second half of 2017, at an average operating unit cost of $83/t for the full year.
“With the completion of the 901 panel and the associated release of ground stresses, a strong improvement in longwall availability and cutting rates is anticipated in the 2018 financial year with total saleable production forecast to exceed nine-million tonnes,” it stated.
Consequently, operating unit costs would further decline towards $77/t, given the operation’s high fixed cost base.